Fear slows change

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Change typically makes people skittish. So when a federal contracting officer hears that a contractor is going through a major internal reorganization, alarm bells sound.

"Most people don't want change, so a reorganization sends up red flags to government people," said Chip Mather, co-founder of Acquisition Solutions Inc., based in Oakton, Va.

So how do officials at federal agencies handle a contractor's reorganization? Most do little unless the ownership of the company changes.

Federal agencies follow a set of guidelines to ensure that the new entity, especially one formed from a merger or acquisition, will fulfill its responsibility on a contract. For example, when a company is taken over through a stock purchase, the agency doesn't get involved. If, however, another firm buys the assets of the company, the officials would determine whether the new company is fit to serve as a government contractor.

"We go through to make sure that the resulting company is responsible and the government's interests are protected," said David Drabkin, deputy associate administrator for acquisition policy at the General Services Administration.

But Drabkin said he's rarely seen situations in which agency officials rejected the new company. Most reorganizations are of little notice to federal contracting officers.

"A reorganization in the company results in the change of names of people who can sign various contract documents on behalf of the company, but that's about it," he said. "It's pretty much a

paperwork drill."

Officials are mostly concerned about whether the work will be completed.

"Our concern is that they satisfactorily fulfill their contractual obligations to NASA," said Doc Mirelson, a NASA spokesman.